Rabobank survey says farmers’ confidence has lifted nationally but still in negative territory

Australian farmers still worry about commodity prices and input costs but a survey has revealed they’re feeling a bit more confident about the future and one state is leading the comeback.

Confidence in the Australian farm sector has improved marginally thanks to easing concerns about commodity prices and input costs, however it remains in negative territory overall.

The latest quarterly Rabobank Rural Confidence Survey saw confidence lift nationally to minus 22 per cent from minus 25 per cent in the first quarter of 2023, the lowest level since late 2018.

Of the survey of 1000 farmers around half expected no change to how the Australian agricultural economy performs over the next 12 months and 13 per cent anticipated that conditions will improve, up from 11 per cent in the previous survey.

The survey revealed that 35 per cent thought conditions would worsen, down from 36 per cent previously.

Of those who thought conditions will worsen 56 per cent were worried about falling commodity prices, compared to 68 per cent in the previous quarter and 29 per cent were concerned about rising input costs compared to 35 per cent.

However, an increased number were now concerned about government intervention/policies, with the number of farmers citing as a reason for apprehension lifting to 18 per cent from 10 per cent in the previous survey.

Rabobank group executive for Country Banking Australia Marcel van Doremaele.

Rabobank group executive for Country Banking Australia Marcel van Doremaele said while nationally confidence increased marginally, it was riding on the back of a much larger surge of positivity in Queensland, where confidence lifted from - 30 per cent to -13 per cent.

“We can’t credit this just to winning the State of Origin opener – seasonal conditions and commodity prices are the real drivers of the optimistic outlook in Queensland,” he said.

“These factors also improved confidence in Victoria, although not as notably as in the

Sunshine state.

“Across the rest of the country, sentiment is more tempered. Although it remains in negative territory in all states, confidence has stabilised in South Australia and NSW

and dropped off significantly in Tasmania and Western Australia.”

The survey found farmers with a positive outlook were buoyed by improved markets, and 65 per cent nominated rising commodity prices as a driver for their confidence, up from 55 per cent in the first quarter of 2023.

The good season remained a factor for optimism for a third, although seasonal confidence eased back to 33 per cent, down from 38 per cent the previous quarter.

Mr van Doremaele said farmers have ridden a rollercoaster of seasons, historically high commodity prices and “eye-watering” input costs in recent years.

“Now, as the heat comes out of many commodities and input prices ease, farmers are adjusting their outlook in response to normalisation of economic conditions,” he said.

Originally published as Rabobank survey says farmers’ confidence has lifted nationally but still in negative territory